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Road Transport companies reject work due to high fuel prices

15/09/2011

A recent survey, conducted by the Fuelcard Company has indicated that a growing number of road transport operators are refusing work due to soaring fuel prices.

Of the 1480 road transport operators surveyed, over one third (35%) indicated that rising fuel prices have left a number of jobs unprofitable and therefore not worth taking on. Many firms surveyed by the Fuelcard Company in fact turn down work on a daily basis for this reason.

In the most extreme cases, some road transport operators have admitted to profit losses of up to 15% as a direct result of increasing fuel prices. A common theme arising from the survey was the belief that the rising fuel prices are damaging the road transport industry.

Jakes de Kock, sales and marketing director at Fuelcard, says: “The increase has hit small and medium businesses particularly hard, with many forced out of business. The rise will see the price of everyday goods rise steeply and many jobs could be lost.”

In addition he said “Support is needed to keep the industry afloat and we urge government to review levels of tax applied to fuel.”

The government recently responded after its application to the European Commission for a 5p per litre discount for rural operators was accepted. The Road Haulage Association has welcomed the European Commission move to launch the fuel duty rebate scheme to help hard pressed rural haulage companies.

Those most likely to benefit from the scheme are rural Scottish road transport operators. Phil Flanders, director of the Road Haulage Association said:

“There are numerous areas on the Scottish mainland which are very remote in terms of freight journeys; Ardnamurchan and the Mull of Kintyre for example. Pump prices in these areas are particularly high compared to mainland areas because of the high transport and distribution costs.”

Diesel was 152.9p a litre at Lerwick in Shetland on Monday – nearly 13p above the UK average, according to the petrolprices.com comparison website.

Hauliers and islanders welcomed the breakthrough, but fuel retailers described the measure as a “lose-lose” scheme for filling stations. Ministers will try to allay fears struggling filling stations could be forced out of business because of delays in being refunded for the discount.

RMI Petrol chairman Brian Madderson, which represents the 62 filling stations on the Scottish islands, said: “Retailers will not benefit from any increase in fuel sold, and just be landed with extra paperwork.”

It is understood that UK ministers hope the scheme will be introduced by the turn of the year. However, despite backing from the European Commission, the plan cannot progress until it receives the approval of EU finance ministers.

A Treasury spokesman said: “The European Commission decision is a positive step towards delivering cheaper fuel to remote island communities. The UK Government is working to secure the final agreement of member states and get savings at the pump as quickly as
possible.”

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